Gov’t, miners to discuss looming massive job-cuts

Government is pushing for a strategic meeting with mining companies in the coming weeks to discuss various challenges affecting the industry, Minister for Lands and Natural Resource, Alhaji Inusah Fuseini told B&FT.

“We are calling all the mining companies into a strategic meeting under the auspices of the Ghana Chamber of Mines to discuss ways of turning these challenges into an opportunity.

 “Currently, the Chamber is in discussions with its stakeholders and other companies to find a suitable time for us to be able to meet and discuss the crisis in the next coming week,” he said.

B&FT has gathered that among some of the critical issues to be tabled is the massive redundancy situation facing the sector, which is becoming a threat to government policy direction and the economy.

The mining sector has in recent times lost significant amounts of revenue following the drop in gold price on the global market.

This has pushed most of the mining companies to re-strategise and embark on a retrenchment programme so as to cut costs and ensure sustainability of their operations.

Already, Newmont Ghana Gold and AngloGold Ashanti have announced retrenchment of their mining workforces, which would lead to job-losses of miners in the coming months.

The massive job-cut plans employed by the mining companies is sending worrying signals to government and the labour unions in the country as the commodity prices continues to dip on the international market, with its resultant effect on the country’s economy.

“Obviously, there is a problem; people are being laid-off and they will be challenged to find alternative employment. This is certainly a worry to government.

 “If the economy is not capable of generating enough employment in the short-term, then we have to deal with the issue of unemployment,” Alhaji Fuseini said, adding that “government should be able to turn this challenge into an opportunity”. 

Gold accounts for 90-95 percent of activity in the mining sector. Its contribution to the overall economy accounts for about 60 percent of total exports.

The price of gold has declined by almost 30 percent on the world market as at June 2013, sending worrying signals that it will negatively affect government revenue and the economy, since gold is the country’s highest gross foreign-exchange earner.

Analysts have suggested a policy direction to focus on linkages and multiplier-effects within the sector to help boost revenue generation and job-creation.

Tim Goldsmith, Global Mining Leader at PricewaterhouseCoopers, in an interview with B&FT, proposed a mature and transparent dialogue between Governments and miners regarding implementation of industry to ensure maximum benefit. 

“I think there will be very interesting times ahead. A good Government will work very well with a good industry to come up with good solutions; and a bad Government and bad industry will end up with bad solutions.”

He said both companies and Governments got carried away in the last 10 years, hence the implementation of new mining tax regimes in some countries.

“Governments need to understand that the easy days are gone, and that both must work together in the industry. 

“The days of maximising value by solely increasing production volumes are gone. The future is about managing productivity and improving efficiencies, both of which have suffered in recent years,” he said.